Bulls-Eye: An Overly Broad Radius

bullseyeMany non-competes will prohibit a former employee from competing with in a certain defined radius.  Drawing a circle and declaring it a non-compete zone makes for a good target for employees looking to hit the bulls-eye when attacking a noncompete.  One of my favorite cases is Stringer v. Herron, 309 S.C. 529, 424 S.E.2d 547 ( S.C. App. 1992).  In Stringer, Herron and Stringer had entered into a written employment contract on July 1, 1985.  The contract, which was to begin on July 1, 1986, and to end on July 1, 1991, contained the following covenant:

During a period of three years from the termination of the employee’s employment … the employee will not associate  himself or engage in, directly  or indirectly, any business or practice which exists for the practice of veterinary medicine within fifteen miles of any veterinary practice  operated by the employer … at the time of termination of employment.

As far as noncompetes go, seems fairly reasonable on its face, wouldn’t you say?  Well, consider the following facts:  ” The practice locations were so situated within the county that the 15-mile radius around each one overlapped with the others and together they created a proscribed area that embraced nearly all of Anderson County, parts of Abbeville, Greenville, Pickens, and Oconee Counties, and, indeed, a small part of Georgia. Although 96 per cent of Stringer’s 14,326 clients lived within 15 miles of at least one of the three practice locations, 55 per cent or about 7,879 of them lived within 5 miles and 84 per cent or about 12,034 of them lived within 10 miles of at least one of these locations.”

The court held that considering that a “overwhelming majority” of the customers live much closer than 15 miles of one of the three practice locations that the non-compete was overly broad and unenforceable.  The radius made the issue an all or nothing, winner take all.  The former employee was permitted to practice veterinary medicine wherever he chose.

Leave a Reply

Your email address will not be published. Required fields are marked *